How to Raise Prices Without Losing Customers | SCORE

Brian Winch | June 28, 2017


Source: https://www.score.org

You want to raise prices but you’re concerned how your customers will react when they’re given the news. Sure, a price increase may cost you a client or two but you may still end up increasing your sales. Use a tactful approach to informing your customers that you’re about to raise prices. It may also transform the way you do business.

Retail businesses typically raise prices without their customers noticing too much. But if you own a service business you’ll need to notify your customers in advance of your price increase.

How long has it been since you last raised your prices? What’s your competitors doing? Are prices staying the same or going down as a result of more competitors entering the field? If you decide to raise prices then you’ll need to briefly explain to them your reasons as to why you’re increasing your prices with the focus being on how your customer will benefit.

Clients who are focused mainly on price may decide to stop doing business with you, but are they really the clients you want to keep? They often times also are very demanding with their service expectations and take up more of your time than your other customers. Many times, service business owners discover raising prices results in attracting new, more profitable customers who have no reservations paying a higher price in return for better quality work.

Have you heard of the 80/20 rule? Basically, it states that 80% of your sales will come from 20% of your customers. More often than not, this 20% of your client base loves to do business with you and most likely will do more. You need to focus your sales efforts and time on these clients and weed out the undesired and unprofitable.

SCORE and Canon U.S.A., Inc., offers these 5 do’s and don’ts to raise prices without losing customers.

https://www.score.org/resource/how-raise-prices-without-losing-customersYou’ve been tracking your small business’s numbers regularly, and you know it’s time to raise prices. Follow these five do’s and don’ts to raise prices without losing customers. Read more…

 

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